Green investing is back in vogue

Commentary: After a lull, clean-tech is making a move again

ThomasKostigen

SANTA MONICA, Calif. (MarketWatch) — Going green is back in vogue and you can bet investment opportunities will follow.

Superstorm Sandy, droughts, and freakish weather events around the world have turned people’s attentions to the climate and climate change once again.

Climate talks in Doha, Qatar, along with the recent announcement of a high-profile television series on climate change set to air on the Showtime Network next year indicate that indeed green issues are rising again in the public mindset.

First Solar

Investments in solar power and other green technologies are back in vogue.

Globally, the environment has been woven into impact investing through programs and products that address water, waste and energy. Impact investing is the school of finance that produces double-barrel returns: creating social impact (on people and the planet) as well as financial returns.

Domestically, green initiatives have waned. The economic downturn of 2008 pushed environmental initiatives to the bottom of the list of considerations for many people. Clean-tech investments didn’t produce the high returns that many of them promised. And global-warming skeptics raised a lot of doubts in the public’s consciousness. It didn’t help that the Intergovernmental Panel on Climate Change underwent several scandals.

The thermostat that programs itself

(2:40)

The father of the iPod and iPhone is turning his attention towards one of the most prosaic domestic technologies — the thermostat. He hopes smart devices will slash energy bills and reduce carbon emissions. Photo: Getty Images

This, after green entered the zeitgeist at a blistering speed following Al Gore’s 2006 book and documentary “An Inconvenient Truth.”

The rise and fall and now rise again of the green movement is being likened to the rise and fall and rise again of Internet companies. In fact, much of the initial investment that went into sustainable fuels, infrastructure, and technologies has laid the groundwork for long-term growth to emerge. Again, much like what happened with Internet and technology companies at the turn of the century.

Green stocks are perking up and venture capitalist are once again taking a fresh look at sustainable, or clean-tech, opportunities.

Greenbiz.com recently ran a story entitled “Why the rumors of cleantech’s death were greatly exaggerated” and went on to discuss how we are on the “cusp of an incredibly exciting time.” Read the article here.

Impact investments, which take into account a company’s effect on the environment, are predicted to grow exponentially over the next decade.

Meanwhile, publicly traded stocks in the sector are seeing an uptick. The Dow Jones Sustainability World Index
W1SGITRD, +0.78%
has risen more than 14% over the past six months. Take a look at its chart over the past five years and you’ll see what looks to be a bounce effect occurring: a steep fall from 2008 levels and an upward swing in motion. Volume over the last two years has eclipsed historical records. That means interest is high.

To be sure, green investing and interest in the sustainable sector will meet criticism and outright skepticism. Not everything and everyone will “go green” as many people believed just five years ago. But if there is a cycle to sectors, the green sector is set to come back in full swing — and this time with a base of businesses and believers.

And speaking of cycles, this column’s cycle is set to come to an end. After more than a decade of writing for MarketWatch in all its incarnations, I am saying goodbye.

Thank you all for reading and responding, even those of you happy to see me go. My mission has always been to enliven, spark new ideas and debate. And I can comfortably say that I have accomplished that in spades via this column.

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